DISCLAIMER: THE FOLLOWING "Cost of Freedom Recap" CONTAINS STRONG OPINIONS WHICH ARE NOT A REFLECTION OF THE OPINIONS OF FOX NEWS AND SHOULD NOT BE RELIED UPON AS INVESTMENT ADVICE WHEN MAKING PERSONAL INVESTMENT DECISIONS. IT IS FOX NEWS' POLICY THAT CONTRIBUTORS DISCLOSE POSITIONS THEY HOLD IN STOCKS THEY DISCUSS, THOUGH POSITIONS MAY CHANGE. READERS OF "Cost of Freedom Recap" MUST TAKE RESPONSIBILITY FOR THEIR OWN INVESTMENT DECISIONS.
This past week's Bulls & Bears: Gary B. Smith, Exemplar Capital managing partner; Pat Dorsey, Morningstar.com director of stock research; Scott Bleier, HybridInvestors.com president; Tobin Smith, ChangeWave Research editor; Matt McCall, Penn Financial Group president; and Peter Schiff, Author "Crash Proof"
Trading Pit: Obama's Doom and Gloom Me$$age: Is He Right or Wrong?
Sen. Barack Obama telling voters this week that "our economy is teetering not just on the edge of recession but potentially worse." Is the democratic front-runner on the right track, or using financial fear to win votes in Tuesday’s critical Pennsylvania primary?
Gary B Smith: No, I won't even concede recession, even if we're in a recession, it's going to be mild. Let’s look at some the facts; the whole pillars of this down turn have been in two areas. One is the credit crisis, but bank lending is acutally up one percent since August when this whole mortgage mess more or less started. Two is housing prices, but if you look at the entire country home prices are down only about 3 percent over last year. In fact, in half the states, they're up about 3 percent from fourth quarter 2006 through 2007. So if we're going to have something worse in a recession, there are no facts behind that premise.
Peter Schiff: The problem is we are on the verge of an economic collapse not just a recession. What's happening is the foundation of our bubble economy, which consists of consumer credit and consumption, is giving way. We are going to have to transition or rebuild a sounder foundation based on savings and production. To get from where we are to where we have to be it's going to involve a protracted economic decline. Simultaneous to that we are going to have a substantial increase in consumer prices. Unfortunately, maybe Barack is identifying the problem. But what he's likely to do as president is going to slow down the free market forces, trying to correct these imbalances. He is going to make the situation worse.
Scott Bleier: Listen, we've had boom-bust cycle the last five years. We've had a nice boom and now a bust. The difference between this bust and other cycles are that housing prices got a little too high. There was too much leverage in the system, which has been unwound very quickly. All of this is going to work out just fine. We've got a booming worldwide economy. Peter Schiff has it half right. We're not destroying the foundations; we're going through our normal cycle. Once the cycle is done and the leverage is unwound, our 13 trillion dollar economy and globalization of the whole world is going to be beneficial to us.
Pat Dorsey: Well, I’m not as bearish as Mr. Schiff, but we've never been in a state of declining real estate prices. This hasn't happened on a national basis for an extended time. Rising real estate prices positively affect consumer spending and it looks like they're being negative on the way down. I don't think you can discount the possibility of something ugly.
Tobin Smith: People are missing how flexible our actual economy is. We have 1 1/2 billion new consumers throughout the world that have entered the economies of the world. That's a new dynamic that has changed to the positive ability for us to grow.
Matt McCall: How can Peter say that the global economy is good, but the U.S. is going to collapse? That's ridiculous, you can't have both! We're still the largest nation in the world and the biggest economy in the world. If the biggest economy in the world collapses you can't tell me it's not going to have an affect on the rest of the world. That's crazy!
'Gas Tax Holiday': Would It Rev Up Economy?
Gas prices hitting a new high. The national average now north of 3-40 a gallon and set to go higher. So is it time for a gas tax holiday? That's what Senator John McCain is calling for right now. His plan will get rid of that 18 cents a gallon federal tax from Memorial Day to labor day.
Matt McCall: Absolutely, any plan of attack is good for the economy. It gets in people's hands and suddenly they think, “hey I saved on gas today let's go out to eat”. It would be great for the economy.
Gary B Smith: I think they should make the cut permanent. Let the government get used to being without the “crack cocaine” of taxes for a while.
Tobin Smith: We should have a gas-guzzler tax on the guzzlers. Take that money and use it exclusively to fund non-fossil fuels.
Pat Dorsey: It's only about a 5 percent reduction in the cost of gas, so I don't think it's going to stimulate oodles and oodles of driving.
Scott Bleier: They say that they could save about 7 billion dollars to the U.S. consumer, but it's going to cost the government about 10 billion dollars. Remember, they need that money to fix the roads. If they don't fix the roads they have a deficit spend and raise your taxes somewhere else.
Stock X-Change: Stocks Set to Takeoff on the Next Big Takeover
We've got the names in the Stock X-Change.
Scott Bleier: Idexx Laboratories (IDXX)
Matt McCall: Charles Schwab (SCHW)
Gary B Smith: Citigroup (C)
Tobin Smith: Devon Energy (DVN)
Pat Dorsey: JPMorgan Chase (JPM)
Gary B Smith: Cheap Summer Travel Is Great For "CHH"; up 20 percent By End Of '08
Tobin Smith: More Parents Start Spoiling Their Kids; Buy "ANF"
Pat Dorsey: Get Smart With Apollo (APOL); Up 50 percent In Two Years
Scott Bleier: "Sunshine Boys" Retire Well! "SRZ" Up 50 percent In One Year
Matt McCall: Fill Up With Food! "SYT" Up 40 percent In One Year
Neil Cavuto was joined by Charles Payne, wstreet.com; Tracy Byrnes, FOX Business Network; Adam Lashinsky, Fortune Magazine; Troy Dunn, "Young Bucks…" author; Leigh Gallagher, Fortune Magazine.
Bottom Line: A Taxing Issue: Which Plan Does Wall Street Want? McCain's 'No More Taxes' or Clinton and Obama's 'Tax the Rich'?
Neil Cavuto: Today, in their own words, John McCain saying he won't hike taxes; Hillary Clinton and Barack Obama saying they will. Which plan is the best one for America?
Charles Payne: I love the idea of no tax hikes! You know, since we had these tax cuts, tax revenue from 2004 – 2007 surged tremendously. In fact, it was the best three-year run since 1966 – 1969. The notion of taxing, particularly as the way the Democrats are putting it, is not an economic plan; it's a punitive punishment for being successful. That's one of the problems I have with the plan. The vitriolic attitude about being successful and making money… it's almost as if you're doing something wrong. As far as economically, I think a tax hike is going to completely backfire. Let people have their money. Let people use their money. That's what a capitalist system is about… put money to work and let the country become better.
Neil Cavuto: You know, one of the most recent presidential candidates to say unequivocally that he would raise taxes was Walter Mondale. And that didn't end up so good for him… So, could these two Democratic candidates be facing the same fate?
Leigh Gallagher: They could. But, I would say times are really different now. I mean, the tax system is not fair as it stands right now. And you know, people had been saying that for the past several years until the current economic crisis we've been in. People are realizing the middle class is really being squeezed.
Neil Cavuto: So you un-squeeze it by screwing the top guys?
Leigh Gallagher: No, you have them pay a little more proportionately. Even it out a bit.
Neil Cavuto: But, the rich do pay, by far, the majority.
Leigh Gallagher: The tax cuts from 2003 benefit the rich overwhelmingly.
Neil Cavuto: Because they pay more.
Leigh Gallagher: They pay more, but they earn more. In terms of proportionate amount…
Neil Cavuto: Tracy, what do you think?
Tracy Byrnes: It makes no sense to me. Back in 1991, they put a sales tax on luxury items because they thought the rich could handle it. But, the rich stopped buying luxury items and the demand went down and unemployment rose in that industry! When Clinton cut the capital gains tax, he saw the economy pop. That was 1997. There's been evidence of tax cuts working. The notion that raising taxes at time when people's paychecks are stretched because of this so-called recession or slowdown or whatever we're in… the last thing you want to do is take more money out of the paychecks. They have been increasing payroll taxes by the minute. Raising taxes will kill the small businesses. All-around, the increase in taxes is going to hurt our economy.
Neil Cavuto: Adam, just to pay for what the government is being asked to do… helping people who are late on their credit cards, someone is going to have to pay for that. So it's almost inevitable that taxes are going to go up, and I suspect not just on the well-to-do, but play this out for me.
Adam Lashinsky: Well, you have cut right to the heart of the matter, Neil. What is interesting, and think back to what you said last Saturday morning that everyone is a Democrat now, including John McCain. You know, before a week ago, I think we might have expected to have seen John McCain proposing tax increases and in fact, I think he still will. He said he isn't going to, but he wouldn't make an actual promise that he wouldn't. A couple of quick points: This gasoline tax holiday is just silly. It's a populist measure intended to get votes and it won't do any good for the…
Neil Cavuto: We should explain that Senator McCain wants to take the federal $0.18 tax off of gasoline from, I think, Memorial Day to Labor Day…
Adam Lashinsky: It's not good economics. It's not good prudent management of the government. And then, you know, we can twist the argument any way you like. If you look at the details of what Senators Obama and Clinton are saying, they're bending over backwards not to raise taxes on people not only who do not make a lot of money, but people who are moderately wealthy as well. Getting things back into some sort of rational order for the richest people in society is not going to kill capitalism as we know it.
Neil Cavuto: Adam, I love you dearly… But Troy, this is my worry about the definition of the rich: I remember when the whole campaign started. I think the rich were defined as someone making $1 million. Then, all of a sudden, we started hearing $500,000 makes you rich. Now, $200,000 - $250,000. The number keeps coming down. And if some of Barack Obama's plans are enacted… that number will get down to about $100,000. My point is that the definition of "rich" keeps changing.
Troy Dunn: It's another chapter in the Obama "stick it to the man" plan. We've got to stop using the word rich and call those people what they really are… and that is job generators. If you go back to 1930 and learn from history so we don't have to repeat it again, in 1929 we started into a recession. Hoover started writing massive tax increases and what happened? We went from what should have been a one or two year market correction to an 11 year Great Depression. It happened because of tax increases. What people need to understand is that when taxes go up, so does unemployment. If you bring the taxes down on the "job generators," then unemployment will drop.
Neil Cavuto: To Leigh's point… and she raised a valid one… when Bill Clinton took office, he raised taxes on the upper income, I think we went up to 39.6 percent, which is the rate, inevitably, we are going to return to, and we took off! Charles, that is the argument the Democrats traditionally raise to say, "You know. We don't always go to hell in a hand basket."
Charles Payne: Well yeah. But other taxes were cut and I think Tracy brought that up with the capital gains tax. The idea is we need to make it so that we invest in this country, so the average individual can invest in this country, and so that the rich can invest too. I think the whole notion that somehow the rich should be punished and taxed… I don't understand when you say it's not fair. What part of it's not fair? They're paying the lion's share. How can you take 1 percent of the population, and they pay more than half the taxes, and say it's not fair?
Leigh Gallagher: Investing in this country, Charles, is one thing. But there's something else to think about and nobody is talking about.
Charles Payne: So talk about it.
Leigh Gallagher: It's the deficit! The long-term threat to the economy is the deficit. Short-term, yes, we're talking about spending. But, you really have to think we're spending like crazy right now. I mean, it has to come from somewhere.
Charles Payne: But that's just it! When you say tax, all we're saying is that we want the government to be "Big Brother" and take away our ability to go out and make it on our own… let the government have all your money and reap the benefits… That's just crazy.
Tracy Byrnes: More and more lower income people own stocks and are living off their dividend checks. So you're going to take away the tax cuts and the dividend tax cut? You'll end up taxing the lower income people… the so-called "widows and orphans."
Neil Cavuto: Adam, your quick counter?
Adam Lashinsky: We're talking politics. A few months ago, we were discussing a flat tax. We're not discussing a flat tax anymore. This is a bunch of tweaks in either direction. We're going to get there eventually, and you guys want to make this into some sort of ideological debate. It doesn't need to be.
Head to Head: Are Airfares Too Cheap?
Neil Cavuto: Alright. This week, a marriage proposal in the sky. Delta and Northwest Airlines planning to hook up to become the largest carrier. Regulators warning if that happens, you're going to pay a whole lot more to fly… and someone here says that's fine with him because he thinks airfares should be a whole lot higher anyway! Time to go "Head to Head."
Ok, Troy. You know you're going to get a lot of banging around here… why do you think airfares should be higher?
Troy Dunn: Because a business has to make money to stick around. And, because there's a couple of areas where you don't want people to cut corners; one is your surgeon and the other is the guy flying you 30,000 feet in the air. Economy of scales are no longer effective in the airline industry. We need to make more money per seat. I'm suggesting the airlines return to their roots, to the time when it was a luxury form of travel… when people paid a little more in relation to the economy, and we got service. Here's what is happening right now, and this is the reality check, the airlines are raising fares, they're just not calling it a fare hike… they're charging more for baggage, for changing your flight, and for everything…
Neil Cavuto: Including where you sit.
Troy Dunn: My suggestion is raise fares to save the economy. You'll end up injecting more money into the bus industry, railroad industry…
Neil Cavuto: Let me ask Charles this… this is about commercial travel, Charles… and I know that might be an alien concept to you, but should fares go higher?
Charles Payne: I agree with Troy in a sense. They have no choice, really. Just look at the first two months of the year. Jet fuel prices went up 55 percent and airfares went up 6 percent. No business in the world can stay around like that. And I think part of it is the fact that you have to weed out the weak. People are going to fly. Obviously, there are some at the margins who are going to say, I'm not going to do it! But, people have to get from one place to the other.
Tracy Byrnes: That is crazy! I paid $600 a seat, one of which my daughter didn't see the entire time.
Charles Payne: Where did you go?
Tracy Byrnes: We were delayed more than 24 hours. I had to buy the kids' food. I paid $3 for a cookie and got charged extra because my bag was too heavy.
Neil Cavuto: $3 for a cookie??
Tracy Byrnes: $3!
Neil Cavuto: I hope it was a good cookie…
Tracy Byrnes: But wait!
Charles Payne: Four people for $600 roundtrip??
Tracy Byrnes: No, a piece! You're going to lose families like mine if you jack up the prices any higher.
Charles Payne: Where are you going to go?
Tracy Byrnes: I'm going to stay in Jersey! I'm not going to travel.
Adam Lashinsky: The problem, Trace, is the airlines have been catering to families like yours for too long. And, they have been shooting themselves in the food by doing it. You know, Charles hit it on the head. American Airlines just lost a boatload of money because the fuel prices went up 45 percent in the first quarter and managed to raise fares only 6 percent. Something's got to give and that means they are going to have to stop offering ultra-low prices and some people won't be able to fly any more. That's the only way for the industry to fix itself and it's going to be painful.
Leigh Gallagher: The airline industry has niched out. There's now something for everybody. If you want all business class, fly some of the startups like Ios and Maxjet. Bear bones? Fly Jet Blue. You can't just jack everything up the way it was 20 years ago. Prices have come down for a reason. I don't think people will pay higher prices. I think we're too used to the low fares.
Tracy Byrnes: And Adam, don't you think it's counter-intuitive to the fact that we want to become a global world? We want to be able to hop on a plane and be in a meeting in Paris instantly, as opposed to having to pay thousand of dollars.
Charles Payne: Those tickets cost a lot of money!
Tracy Byrnes: This is what I'm saying! You're cutting into corporate budgets.
Neil Cavuto: Well, Troy, you started all of this. I will let you end it. What do you think?
Troy Dunn: Flying is a privilege. It's not a right. There are plenty of passengers to fill those seats regardless of how much it costs. Of course, you'd love to have your family travel cheap! I'd like a Ferrari for $1,000. The reality of it is if you're planning your vacation and you think it's going to be cheaper to fly than to drive, something is wrong with that picture.
Neil Cavuto: But, the reality is that it is the picture. Someone will not be in sync with the industry and lift their prices. It always happens. So there's always fare wars and as Charles said, will drive the lesser players out of business.
Troy Dunn: Eventually they are going to get in a room together and say, "Look. We're either all going to die together or live together. One extreme or the other." I have a close friend who is a chairman of an airline. I wish like crazy he would say in public what he says to me in private. They are all very nervous that if they don't get on the same page…
Neil Cavuto: Be careful. That's called collusion! But, we'll leave that for another show.
More for Your Money: Stocks Ready for Takeoff
Neil Cavuto: Ok, time to make some money! This week's theme: Stocks ready to take off… a whole lot sooner than your next flight!
Leigh Gallagher: ArcelorMittal (MT)
Adam Lashinsky: CapitalSource (CSE)
Charles Payne: DryShips (DRYS)
FOX on the Spot
Charles Payne: "BIDU" makes 25 percent leap by end of Summer Olympics!
Leigh Gallagher: GE CEO Immelt won't break up the Company
Adam Lashinsky: Wrong! GE sells NBC/Universal unit
Tracy Byrnes: Upside to High Gas Prices? Discounts & Perks at Hotels!
Troy Dunn: Air Travel Saved by Jet Taxi Entrepreneurs!
In Focus: Would Hillary Clinton's 'Shared Prosperity' Plan Make Us More or Less Prosperous?
Mike Ozanian, National Editor: Less prosperous, particularly the middle class. One example, she wants to raise the capital gains tax. Do you know that 80 percent of the households that pay the cap gains tax earn less than $100k a year? She will hammer the middle class of this country.
Mike Maiello, Associate Editor: I think absolutely more prosperous. The people who really benefit from low capital gains taxes are really rich people who don't work for salaries for a living. The numbers that they're paying are very small per family. The real people that are getting the deal here are the Warren Buffets of the world and the hedge fund managers of the world. The people who worked hard and made all these productivity gains have driven our economy for three decades now are the ones that have been left behind and at least Hillary is paying attention to them.
Victoria Barret, Associate Editor: I think less prosperous. By the way Mike, Warren Buffet works pretty hard. I think you're setting up this fake world where people who make money don't work hard or don't work as hard as people who are making less money, and that simply isn't true. Bottom line, Hillary's plan aims to punish the rich and put that money into unions, that's a disaster. Money going to unions is moving backwards for our country, not forward. She should be cutting taxes, but not taxing the rich to pay off unions which are big donors to her campaign.
Quentin Hardy, Silicon Valley Bureau Chief: Look, all three candidates line up on a fundamental reality, which is, after eight years of tax cutting, there are enormous and troubling problems in the democracy. Over 90 percent of the people in the top 100 colleges in America come from the upper half of the country. The vast majority of the people doing the killing and the dying in Iraq and Afghanistan come from the lower half. Does this bother anybody else about the future of the democracy? It bothers McCain and Obama and Clinton, they all talk about it in one form or the other. McCain says voluntary restraints by CEOs, and the other two say taxes on the wealthy to change education and maybe some national service as well.
Bill Baldwin, Editor: Hillary would definitely bring great prosperity to a select few: to our lawyers, lobbyists, and tax shelter salesmen. Listen, this is a politician who really believes that you can make the country more prosperous by making the government bigger. This is a politician who wrote a book along the lines of it – 'it takes a government to raise a child'. Get ready for the federal babysitting authority.
Neil Weinberg, Senior Editor: I think we need this right now. Despite what 'capitalist tool Bill' is saying and despite what 'comrade Quentin' is saying, both sides are half wrong here. The fact is of the matter is that the republicans have been shaming drunken sailors in the way they've been spending. We need some sort of fiscal restraint and the only way to get it is to make people feel a little bite here. Where are we going to start to balance the budget? We're going to start where people can afford it, with the wealthy. I'm sorry to say it, but that's where we got to start.
Blame Out of Sight Food Prices on Congress' 'Green Gas' Laws?
Jack Gage, Associate Editor: Absolutely! Look, it's a great irony of today that lawmakers who want to save the polar bears and America's standing in the world are starving families in places like Haiti where there have been riots over the 75 percent rise in staples like beans and grain. This is ridiculous. It's the fault of the US Congress. They're putting such starving restraint on these important commodities.
Elizabeth MacDonald, Fox Business Network: Crimes against humanity? This madness is hysteria, but I see what you're saying about diverting corn into the gas tanks. That is a problem, yes, and so is the Fed inflating money supply. But look at worldwide what's going on. There are food shortages, and rice shortages, and grain shortages around the world. I think it's not just the US Congress, but what is going on globally that you have to watch.
Quentin Hardy: They certainly contribute, but you can't blame Congress, they're just doing what their bosses tell them, their bosses in this case being agribusiness. Ethanol is just the latest, and tariffs on Brazilian made ethanol are just the latest. There is also the FDA's corn fed beef rules. There are sugar imports that McCain was rightly kicking this week. Here's a great one – we can't buy food from African farmers to give to starving Africans. We have to buy expensive American food and ship it over there. People are dying because of that.
Evelyn Rusli, Forbes.com Anchor: I actually agree with Quentin here because you can't be short sighted and think it's just the fault of Congress. We're in a new world order. There is a rise in the middle class, whether it's Asia, Latin America, Europe, and they require more food. That demand is increasing, but beyond that oil prices are high, and when you transfer food, that's going to be embedded in the price of food, so it's not just Congress here.
John Rutledge, Forbes Contributor: I'm happy to have a chance to agree with my friend, Quentin here, for maybe the first time in a while. Two days ago, I was at a meeting at the United Nations in Beijing about climate change, food shortages, and ethanol. The consensus of the group from all over Asia was that these laws are taking food out of the mouths of poor people and stuffing them into the tank of SUVs. They're criminal. You have to remember these countries where people are rioting for food, 40 percent of their budget goes to food, not 10 percent like in the US. This is a terrible problem. These laws aren't even green; they end up using more oil and more carbon. Of course there are more factors involved, the world is growing and so forth, but Congress knew that before they passed these laws. You should do research first to raise farm productivity, and then do ethanol later.
Rich Karlgaard, Publisher: We ought to get rid of all farm subsidies. I join John Rutledge in applauding Quentin Hardy's rare flash of insight today on this matter. I would also say there are other factors – the cheap dollar is not trivial, it's immoral to debase the currency as we have for so many reasons. One of the consequences of this cheapening dollar is that you see investors around the world running into soft commodities driving up the futures of commodities like corn and wheat prices and so on. There is an artificial bubble in the price, and speculators are making money, and it's driving up the price for people that need that food for nourishment.
Did We Just Get 'Buy Signal' for Stocks?
Rich Karlgaard: I think the worst is over, and stocks are really cheap right now by the so-called Fed model where you compare price earnings ratios to the yield on 10-year treasury stocks. They're about 80 percent undervalued. Stocks I would really look at are large, multinational US stocks like Microsoft, Boeing, and IBM. They're going to have 20 percent appreciation this year. That's why I think the Dow will go up to 15,000, because it's made up of large, multinational US companies and a 20 percent movement, which is all it would take, is not out of the realm.
Mike Ozanian: I think the DOW will hit 15,000, but not for two years. The worst is yet to come this summer. We're in this weird economy where companies report $2 million dollar losses, like Citigroup and Merrill Lynch, and the stock prices goes up. This market is being propped up by funny money.
Bill Baldwin: The worst is over for the market, not for the economy. Remember what the market is trying to do. It's trying to see around corners. The reason it's been terrible for six months is that it was anticipating the recession that we may now be in. I think between now and December we're going to see the market anticipating the 2009 rebound. Buy!
Elizabeth MacDonald: I think they are climbing the wall of worry. The financials, executives down on Wall Street, they wanted to make their financial statements. They wanted to say we're in the ninth inning. Yeah, and their financials smell as sweet as lilacs after a fresh summer rain. It's nonsense. We're not in the ninth inning. We're in three or four. We're about halfway through the write-downs. Some of the estimates on the write-downs are over hyped and hysterical, and out of whack, but we can expect $400 billion write-downs, we're $200 billion down.
John Rutledge: They're not playing baseball at all; they're in the stock market. I'm a bull on this. First quarter is the worst we've seen in the economy, and when they tally up the number it's going to be 1 to 2 percent positive growth. Second quarter will be higher than that. Banks are puking up their losses all over the place, that's a technical term, but this is not a recession, which means shrinking GDP. This is a blackout of the bond market and bond market is beginning to trade. That is why the stocks are more resilient. When the bond market's back, the economy will be back. The real issue though is when that happens then we'll be looking at the election. Will they raise tax rates?
Informer: Stocks Under $10!
Evelyn Rusli: ViroPharma (VPHM)
Jack Gage: Texas Roadhouse (TXRH)
Neil Weinberg: Ford Motor (F)
Victoria Barret: SuccessFactors (SFSF)
Should Americans Pick the Riche$t Candidates?
Ben Ferguson, Syndicated Radio Host: It shouldn't scare people that they make a lot of money. The reality is someone has made a fortune off of working hard is how business works and makes him qualified for the White House. It shouldn't disqualify him because, they are too rich. If you worked your tail off and made a lot of money, then good for America and I think a lot of people think, they are afraid of people that have money you shouldn't be, that is the American dream. John Kerry, had all the money and he was playing off that money and that hurt him. You look at Obama and Clinton, they came from working hard. I can't hold that against them and at least it shows they know how to make money.
Jonathan Hoenig, CapitalistPig Asset Management: By that measure, then you should vote for Hillary Clinton, right? You shouldn't be afraid of it. It shouldn't be used as a negative, someone came from nothing. Easiest thing is paint with a big broad brush and all of a sudden because you are rich, you are not qualified. It should help you just because you are rich.
Dagen McDowell, FOX Business Network: Most presidents throughout history were wealthy and lot of money came from family money. It's like John McCain, that was his wife's family's money. It's hard to find presidents that came from nothing and made something out of themselves. Bill Clinton is one of few examples that I can come up with.
Wayne Rogers, Wayne Rogers & Co: Bill Clinton has made his money while being president. He was raised in politics. The political arena is full of guys who capitalized on that. Look at the mayor of New York, Mayor Bloomberg, he's one very wealthy guy and one thing that makes him so good is he is immune to being bribed. Thank god. People like that should be in office because they wouldn't do the wrong things in order to gain money.
Jonas Max Ferris, MaxFunds.com: Politics is more of a business everyday. I'm not against rich politics. I think Bloomberg is a great politician and he is one of richest people in the world. But I don't think it's a great statement for America that you basically have to be in the top 1 percent of the income distribution if you run for president. I can't remember the last time a President wasn't really wealthy. How about being in the top 20 percent? How about someone who is sort of successful who runs a small business and makes a few hundred thousand dollars a year?
'Greedy' Wall Street to Blame for Economic Slowdown?
Wayne Rogers: You know, greed is defined in the dictionary as excessive. We have examples of this. You think about Enron, when we had excessive practices and guys were willing to break the rule…that is why we have regulations now. Well, if within the regulations or within the law, it may not be excessive but if they had broken the rules and they were penalized for it and the ones that were caught should be. By the way, this were the ones that broke the rules, in the case of Wachovia or somebody like that where they issued stock without offering it to the shareholders first, they will get sued.
Gary Kaltbaum, GaryK.com: The word is partly to blame. There is a number that comes out every month that is called consumer confidence and consumers, when they look at what is going on around them and see what is happening with these financial geniuses losing billions of dollars, Bear Stearns going out of business and the next guy lending 30 to 1, it gets consumers down. And I think it partially feeds on itself over time which is what happened over the last few months.
Dagen McDowell: Like it or not, Institutional Investor came out with a survey of the top paying hedge fund managers, $3.7 Billion and Barack Obama brings it up in the debate. You can't get around those kind of numbers. For people who are struggling, you can't possibly like that.
Jonathan Hoenig: In today's America, making money is seen as a sin. How about paying your bills on time…Am I the only one who believes the sub prime crisis was caused by dead beats that didn't pay their bills on time?
Jonas Max Ferris: I remember from undergrad economics that you have recessions and you don't know who to blame half the time…it's just a natural part of the business cycle. As far as greed goes, I don't think greed was the problem. There was greed in some of the brokers but I think stupid lending they thought they was going to get their money back.
Plan to Tax Homeowners for Private Security in Neighborhoods
Jonathan Hoenig: No, this is not right at all. This is the responsibility of the government. This is why we have a government for. Every citizen, rich or poor, has a right to have his property protected by the police. I don't think it's the private citizen's job to organize a militia to protect themselves…this is the role of what government should be doing. If there is problem with the police, let's fix the police. As I understand it, this the government creating some kind of zone where 51 percent of the particular zone want to make a private security force, then you are taxed on that order.
Marc Lamont Hill, professor at Temple University: This isn't a private militia group. The bill says in addition to ordinary policemen, which must be adequate, we have the right to bring a security force. The purpose is to raise home values and to bring investment back in. This is a bill for vouchers. Why wouldn't you be happy about that. But we also have the right as a democracy to ask people what they want. If you look at the bill, we elect a board of directors – a minimum of five people. Those people have the power to add another force if the people want it. So if you don't' want it, don't elect people who are going to vote that way. It's the same thing in broader American democracy…don't vote for it if you don't want it.
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